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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
[Amendment No. ]
Filed by the Registrant |X|
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|_| Confidential, for Use of the Commission Only (as permitted by rule
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|X| Definitive Proxy Statement
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|_| Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
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CENTERPOINT PROPERTIES TRUST
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(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
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was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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CENTERPOINT PROPERTIES TRUST
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 20, 1999
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
CenterPoint Properties Trust (the "Company") will be held at 1808 Swift Road,
Oak Brook, Illinois on Thursday, May 20, 1999 at 11:00 a.m., Central Daylight
Time, for the following purposes:
1. to elect ten trustees to serve until the next annual meeting of
shareholders or special meeting of shareholders held in place
thereof and until their respective successors are elected and
have qualified;
2. to ratify the selection of PricewaterhouseCoopers LLP as
independent public accountants of the Company for the year ending
December 31, 1999;
3. to vote on the approval of the First Amendment to the CenterPoint
Properties 1993 Amended and Restated Stock Option Plan; and
4. to transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
The Board of Trustees has fixed the close of business on March 22, 1999
as the record date for the determination of common shareholders entitled to vote
at the meeting. Only those shareholders whose names appear on record on the
books of the Company at the close of business on such date are entitled to
notice of, and to vote at, the Annual Meeting or any adjournment or adjournments
thereof.
You are cordially invited to attend the meeting in person. Whether or
not you expect to attend the meeting, please sign and date the enclosed proxy
and return it as promptly as possible in the enclosed self-addressed,
postage-prepaid envelope. If you attend the Annual Meeting of Shareholders and
wish to vote in person, your proxy will not be used.
By Order of the Board of Trustees,
Paul S. Fisher
SECRETARY
March 31, 1999
Chicago, Illinois
CENTERPOINT PROPERTIES TRUST
1808 SWIFT ROAD
OAK BROOK, ILLINOIS 60523
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 20, 1999
This proxy statement is furnished to holders of the Common Shares of
Beneficial Interest, par value $.001 per share, of CENTERPOINT PROPERTIES TRUST
(hereinafter called the "Company") in connection with the solicitation of
proxies by the Board of Trustees of the Company to be used at the Annual Meeting
of Shareholders of the Company to be held at 1808 Swift Road, Oak Brook,
Illinois on Thursday, May 20, 1999 at 11:00 a.m., Central Daylight Time, and at
any adjournment or adjournments thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders.
If the accompanying form of proxy is executed and returned, it may
nevertheless be revoked at any time insofar as it has not yet been exercised.
The persons named in the accompanying form of proxy will vote such proxy for
election to the board of the nominees named below. It is anticipated that this
proxy statement and the enclosed proxy will be first mailed to record holders of
the Company's Common Shares on or about March 31, 1999.
The Board of Trustees has fixed the close of business on March 22, 1999
as the record date for the determination of shareholders entitled to receive
notice of and vote at the Annual Meeting of Shareholders. As of March 22, 1999,
the Company had outstanding 20,087,448 Common Shares of Beneficial Interest, par
value $.001 per share.
Each Common Share is entitled to one vote on each matter presented for
ratification. A shareholder who abstains from a vote on any matter by
registering an abstention will be deemed present at the meeting for quorum
purposes but will not be deemed to have voted on that matter. Similarly, in the
event a nominee holding shares for beneficial owners votes on certain matters
pursuant to discretionary authority or instruction from the beneficial owners,
but with respect to one or more other matters does not receive instructions from
the beneficial owners and does not exercise discretionary authority (a so-called
"non-vote"), the shares held by the nominee will be deemed present at the
meeting for quorum purposes but will not be deemed to have voted on such other
matters.
SHAREHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING
Any proposal of a shareholder intended to be presented at the Company's
2000 Annual Meeting of Shareholders must be received by the Company for
inclusion in the proxy statement and form of proxy for that meeting no later
than December 3, 1999.
1
ELECTION OF TRUSTEES
(PROPOSAL 1)
At the meeting a Board of Trustees is to be elected. The nominees for
election as trustee are Nicholas C. Babson, Martin Barber, Norman R. Bobbins,
Alan R. Feld, Paul S. Fisher, John S. Gates, Jr., John J. Kinsella, Michael M.
Mullen, Thomas E. Robinson and Robert L. Stovall. Each trustee elected is to
hold office until the next annual meeting of shareholders or special meeting of
shareholders held in place thereof, and until his successor is elected and
qualified. Trustees are elected by a plurality of the votes cast. The Board of
Trustees does not contemplate that any nominee will be unable to serve as a
trustee for any reason; however, if such inability should occur prior to the
meeting, the proxy holders will select another nominee to stand for election in
his place and stead. The Board of Trustees recommends that the shareholders vote
"FOR" the election of Messrs. Babson, Barber, Bobbins, Feld, Fisher, Gates,
Kinsella, Mullen, Robinson and Stovall.
The Board of Trustees is committed to a policy of having the majority
of the members of the Board be persons who are not current or former members of
the Company's management. To that end, the Governance and Nominating Committee
is currently in the process of recruiting an additional independent trustee for
the Board.
Following is a summary of the name, age and principal occupation or
employment for the past five years of each nominee for election as a trustee and
each executive officer of the Company.
NAME AGE POSITION
---- --- --------
Martin Barber 54 Chairman of the Board
Robert L. Stovall 66 Vice Chairman of the Board
John S. Gates, Jr. 45 President, Chief Executive Officer and Trustee
Michael M. Mullen 44 Executive Vice President and Chief Operating Officer
Paul S. Fisher 43 Executive Vice President, Secretary, Chief Financial
Officer and General Counsel
Rockford O. Kottka 48 Senior Vice President and Treasurer
Paul T. Ahern 38 Executive Vice President, Chief Investment Officer and
Director of Portfolio Operations
Nicholas C. Babson 52 Independent Trustee
Norman R Bobins 56 Independent Trustee
Alan D. Feld 62 Independent Trustee
John J. Kinsella 70 Independent Trustee
Thomas E. Robinson 51 Independent Trustee
MARTIN BARBER. Mr. Barber has been the Chairman of the Board of
Trustees of the Company since its formation in 1984. He has been involved in
commercial real estate since 1969, when he acquired a substantial interest in
Arrowcroft Investments Limited, a commercial property development group, where
he served as Managing Director until 1972, when he sold his interest. At that
time, he founded Capital and Regional Holdings Limited. In 1978, he formed
Capital and Regional Properties plc (which became publicly-traded in the London
stock market in 1986) to engage in real estate and related activities in the
United Kingdom, and has served as its Chairman since that time. In 1984,
together with Mr. Gates, he formed the Company to engage in real estate
activities in the United States, and has also served as its
2
Chairman since that time. In 1996, Mr. Barber was appointed Non-Executive
Director of PRICOA Property Investment Management Ltd. ("PRICOA"), a British
real estate fund management company which is a wholly owned subsidiary of The
Prudential Insurance Company of America and he was named Chairman of the Board
of PRICOA in 1999.
ROBERT L. STOVALL. Mr. Stovall has been a Trustee of the Company since
August, 1993 and was appointed Vice Chairman of the Board of Trustees in July,
1997. From August, 1993 to July, 1997, Mr. Stovall was an Executive Vice
President and the Chief Operating Officer of the Company. From 1975 until he
joined the Company, he served as President and Chief Executive Officer of FCLS
Investors Group, Inc. ("FCLS"), a Chicago-based owner and manager of
warehouse/industrial real estate which he co-founded in 1987 and the operations
of which were consolidated in 1993 with those of the Company. Mr. Stovall began
his career as a real estate salesman in 1957 for the Great Southwest Industrial
District in Arlington-Grand Prairie, Texas. He joined J.L. Williams and Co. Inc.
("Williams"), a Texas-based industrial developer, in 1961. In 1967, he opened
the Chicago branch office of Williams and became Executive Vice President of the
firm. In 1978, he formed Four Columns, Ltd. and purchased Williams' Chicago
operation and properties. In 1987, Four Columns, Ltd. was merged with Stava
Construction Company, another warehouse/industrial development company, and
FCLS/Stava Group was formed, where Mr. Stovall served as Chairman until he
joined the Company. He is a member of the Board of Directors of Greater North
Pulaski Development Corporation, a not-for-profit community development
corporation. Mr. Stovall is a 1955 honors graduate of Yale University with a
Bachelors of Arts degree in American Studies. Mr. Stovall is a member of the
National Association of Industrial and Office Parks. Mr. Stovall is the
father-in-law of Mr. Mullen.
JOHN S. GATES, JR. Mr. Gates has been the President, Chief Executive
Officer and a Trustee of the Company since its formation in 1984. From 1977 to
1981, he was a leasing agent and an investment property acquisition specialist
with CB Richard Ellis Commercial, a real estate brokerage and acquisition firm.
In 1981, he co-founded the Chicago office of Jones Lang Wooton, which advised
foreign and domestic institutions on property investment throughout the Midwest.
He received his Bachelors degree in Economics from Trinity College (Hartford).
Mr. Gates is a trustee of the National Association of Real Estate Investment
Trusts and a member of the Young Presidents Organization, Urban Land Institute,
National Association of Industrial and Office Parks.
MICHAEL M. MULLEN. Mr. Mullen has been the Executive Vice President and
Chief Operating Officer of the Company since July, 1997 and, from August, 1993
to July, 1997, was the Executive Vice President - Marketing and Acquisitions and
Chief Investment and Development Officer of the Company. He was a co- founder of
FCLS and served as its Vice President-Sales, with responsibility for leasing,
built-to-suit sales and acquisitions since 1987. Mr. Mullen graduated from
Loyola University in 1975, with a Bachelor's degree in Finance. He is the
son-in-law of Mr. Stovall.
PAUL S. FISHER. Mr. Fisher has been an Executive Vice President of the
Company since August 1993, and the Secretary, Chief Financial Officer and
General Counsel of the Company since 1991. Between 1988 and 1991, Mr. Fisher was
Vice President, Finance and Acquisitions of Miglin-Beitler, Inc., a
Chicago-based office developer. From 1986 to 1988, Mr. Fisher was Vice
President, Corporate Finance, at The First National Bank of Chicago. From 1982
through 1985, he was Vice President, Partnership Finance, at VMS Realty, a
Chicago-based real estate syndication company. Mr. Fisher graduated from the
University of Notre Dame, SUMMA CUM LAUDE, with a Bachelor of Arts degree in
Economics and Philosophy in 1977. Mr. Fisher received his Juris Doctorate from
the University of Chicago School of Law in 1980. He serves on the board
3
of the Guthrie Institute for Real Estate Studies at the Kellogg School of
Management at Northwestern University.
ROCKFORD O. KOTTKA. Mr. Kottka has been the Senior Vice President and
Treasurer of the Company since 1989. From 1978 to 1989, Mr. Kottka served as the
Vice President and Controller of Globe Industries, Inc., a Chicago based
manufacturer of roofing and automotive acoustical materials. Mr. Kottka
graduated from St. Joseph's Calumet College in 1975 with a Bachelor of Science
degree in Accountancy. Mr. Kottka is a certified public accountant. He is a
member of the American Institute of Certified Public Accountants and the
Illinois CPA Society.
PAUL T. AHERN. Mr. Ahern has been Executive Vice President, Chief
Investment Officer and Director of Portfolio Operations since February, 1999.
From June, 1994 to February, 1999, Mr. Ahern served as Senior Vice President of
Investments of the Company. Mr. Ahern started his career as an accountant for
Centex Homes Corporation. From June 1985 to June 1990, he was an investment
analyst, leasing agent and an investment property specialist with CB Commercial,
a real estate brokerage firm. From June 1990 to January 1993, he was an
investment property specialist for American Heritage Corporation, a real estate
investment firm. Mr. Ahern graduated from Indiana University in 1982 with a
bachelor's degree in Accounting. Mr. Ahern is a member of The Society of
Industrial and Office Realtors and the National Association of Real Estate
Investment Trusts.
NICHOLAS C. BABSON. Mr. Babson has been an independent trustee of the
Company since December 1993, when he was appointed to fill one of four vacancies
existing as a result of an increase in the number of trustees from three to
seven. Mr. Babson served as Chairman and Chief Executive Officer of Babson
Brothers Co. until March, 1999. Mr. Babson also serves as a member of the Board
of Directors of Bradner Central Company, a privately-owned, national distributor
of paper products, a member of the Board of Directors and Past Chairman of the
Equipment Manufacturers Institute and a member of the Board of Trustees of the
Farm Foundation and has served as a member and Past Chairman of the National FFA
Foundation. Mr. Babson is also a member of the Board and Past President of the
Shakespeare Repertory, a Chicago-based theater company. Mr. Babson graduated
from the University of the South with a Bachelor of Arts degree in Political
Science (1968). He currently serves on the Visiting Committee of the University.
NORMAN R. BOBINS. In March, 1998, Mr. Bobins was nominated by the Board
to fill a vacancy created by an increase in the number of trustees from seven to
eight. Mr. Bobins is president and chief executive officer of LaSalle National
Bank and LaSalle National Corporation. He is also chairman of LaSalle Bank N.A.
and head of Midwest Commercial Banking for ABN AMRO North America, Inc., the
parent of LaSalle Banks. LaSalle National Bank is a participating lender in the
Company's $250 million unsecured credit facility and is co-lead lender in the
$50 million unsecured construction loan facility of Center Point Development
Corporation, a subsidiary of the Company. In April 1981, Mr. Bobins joined The
Exchange National Bank of Chicago (which was acquired by LaSalle National
Corporation in 1990), as a senior executive vice president and chief lending
officer. Prior to 1981, Mr. Bobins was senior vice president and held various
other commercial lending positions at American National Bank and Trust Company
over fourteen years. Mr. Bobins holds directorships with the American-Israel
Chamber of Commerce & Industry and the Anti-Defamation League of the B'nai
B'rith, which honored him with its Distinguished Service Award in 1982. In June
1995, Mayor Richard Daley named Mr. Bobins to Chicago's School Reform Board of
Trustees. Mr. Bobins also serves as a trustee of the Public School Teachers'
Pension and Retirement Fund of Chicago and The University of Chicago Hospitals.
He is chairman of the board of directors of the Chicago Clearing House
Association and a director of the Federal Home Loan Bank of Chicago and RREEF
4
America REIT II, Inc. and a member of numerous other boards. Mr. Bobins
graduated from the University of Wisconsin in 1964 with a bachelor of science
degree and received his M.B.A. from The University of Chicago in 1967.
ALAN D. FELD. Mr. Feld has been an independent trustee of the Company
since December 1993, when he was appointed to fill a vacancy on the Board of
Trustees. Since 1960, Mr. Feld has been associated with the law firm of Akin,
Gump, Straus, Hauer & Feld, L.P.P. in Dallas, Texas. He currently serves as a
Senior Executive Partner of the firm and sole shareholder of a professional
corporation that is a partner of the firm. Mr. Feld graduated from Southern
Methodist University with a bachelor of arts degree in 1957. Mr. Feld received
his LL.B. degree from the Southern Methodist University in 1960. He has been a
member of the Texas State Bar since 1960 and a member of the District of
Columbia Bar since 1971. He was a member of the Board of Trustees of Brandeis
University from 1986 to 1996. He serves on the Board of Trustees of Clear
Channel Communications, Inc., a New York Stock Exchange listed company, and is a
Trustee of the AMR AAdvantage Funds (Mutual Funds).
JOHN J. KINSELLA. Mr. Kinsella has been an independent trustee of the
Company since December 1993, when he was appointed to fill a vacancy on the
Board of Trustees. Since 1987, Mr. Kinsella has served as President of the
Kinsella Development Company, Inc., a real estate development company located on
the northwest side of Chicago. From 1951 until 1986, Mr. Kinsella was affiliated
with the advertising firm of Leo Burnett Company, Inc. as a member of its Board
of Directors. At the time of his retirement in 1986, Mr. Kinsella was President,
Chief Executive Officer and Chairman of its Board of Directors. Mr. Kinsella
graduated from Notre Dame University in 1950. He received his master's degree
from De Paul University in Chicago in 1952. Mr. Kinsella has served on the
business and civic boards of a variety of institutions, including the American
Advertising Association, the Field Museum and the Chicago Central Area
Association.
THOMAS E. ROBINSON. Mr. Robinson has been an independent trustee of the
Company since December 1993, when he was appointed to fill a vacancy on the
Board of Trustees. Mr. Robinson is currently a Managing Director in the
Corporate Finance Real Estate Group of Legg Mason Wood Walker, an investment
banking firm headquartered in Baltimore, Maryland, which he joined in June,
1997. Prior to joining that firm, Mr. Robinson was President and Chief Financial
Officer of Storage USA, Inc., a REIT headquartered in Columbia, Maryland,
engaged in the business of owning and operating self-storage warehouses, which
he joined in August 1994. He also serves as a trustee of Tanger Factory Outlet
Centers, Inc. Between August 1993 and August 1994, Mr. Robinson was a senior
executive of Jerry J. Moore Investments, an owner and operator of community and
neighborhood shopping centers located in Texas. Prior to joining Jerry J. Moore
Investments, Mr. Robinson served as National Trustee of REIT Advisory Services
for the national accounting firm of Coopers & Lybrand from 1989 to 1993. From
1981 to 1989, Mr. Robinson served as vice president and general counsel for the
National Association of Real Estate Investment Trusts. Mr. Robinson received his
Bachelor's degree from Washington and Lee University, his Master's degree in
taxation from Georgetown University Law School, and his Juris Doctorate degree
from Suffolk University Law School.
5
BOARD OF TRUSTEES AND COMMITTEES
During fiscal year 1998, the Board of Trustees held 11 meetings. Each
trustee attended more than 75% of the aggregate of the meetings of the Board of
Trustees and the meetings held by Board committees on which he served.
The Board of Trustees of the Company has standing Asset Allocation,
Audit, Compensation and Nominating Committees.
ASSET ALLOCATION COMMITTEE. The Asset Allocation Committee is comprised
of three trustees, Messrs. Babson, Kinsella and Stovall, two of whom are
independent trustees. The Asset Allocation Committee is authorized to review
investment and disposition recommendations of management, make investment
decisions for investments under $10 million and to make recommendations to the
Board of Trustees for other investments. The Asset Allocation Committee held 11
meetings during 1998.
AUDIT COMMITTEE. The Audit Committee is comprised of three trustees,
Messrs. Robinson, Bobins and Kinsella, all of whom are independent trustees. The
Audit Committee is authorized to review management's accounting and control
practices and compliance with prevailing financial reporting standards, to make
recommendations to the Board of Trustees regarding financial reporting policy,
and to oversee the Company's annual audit. The Audit Committee held 2 meetings
during 1998.
COMPENSATION COMMITTEE. The Compensation Committee is comprised of
three trustees, Messrs. Feld, Babson and Gates, two of whom are independent
trustees. The Compensation Committee exercises all powers of the Board of
Trustees in connection with the compensation of executive officers, including
incentive compensation and benefit plans. The independent trustees on the
Compensation Committee, Messrs. Babson and Feld, also serve as the Company's
Stock Option Committee and, as such, are empowered to grant stock options in
accordance with the Company's Stock Option Plan to the trustees, management and
other employees of the Company. The Compensation Committee held 3 meetings
during 1998.
GOVERNANCE AND NOMINATING COMMITTEE. The Governance and Nominating
Committee is comprised of three trustees, Messrs. Barber, Feld and Robinson all
of whom are independent trustees. The Nominating and Governance Committee is
authorized to review the Company's governance practices, including the size and
composition of the Board of Trustees and to make recommendations to the Board of
Trustees concerning nominees for election as trustees. The Nominating and
Governance Committee held 2 meetings during 1998.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's trustees and executive officers, and
persons who own more than ten percent of a registered class of the Company's
equity securities, to file with the Securities and Exchange Commission (the
"SEC") and the New York Stock Exchange initial reports of ownership and reports
of changes in ownership of Common Shares and other equity securities of the
Company. Officers, trustees and greater than ten-percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
6
To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, the Company believes that, except as set forth below, all
Section 16(a) filing requirements applicable to its officers, trustees and
greater than ten-percent beneficial owners were complied with during the fiscal
year ended December 31, 1998.
John Kinsella, a trustee of the Company, filed a Form 4, reporting a
purchase of Common Shares, after the date prescribed under Section 16(a) of the
Securities Exchange Act of 1934, as amended, and Norman Bobins, a trustee of the
Company, filed a Form 3, reporting his initial ownership of Common Shares, after
the date prescribed under Section 16(a) of the Securities Exchange Act of 1934,
as amended.
RATIFICATION OF SELECTION OF ACCOUNTANTS
(PROPOSAL 2)
The Board of Trustees of the Company has selected
PricewaterhouseCoopers LLP as the independent public accountants of the Company
for the fiscal year ending December 31, 1999. The appointment of auditors is
approved annually by the Board of Trustees and is subsequently submitted to the
shareholders for ratification. A representative of PricewaterhouseCoopers LLP
will be at the meeting to answer questions concerning the Company's financial
statements and will have an opportunity to make a statement if he or she chooses
to do so.
The Board of Trustees recommends that shareholders ratify the
appointment of Pricewaterhouse Coopers LLC as independent public accountant, and
unless specified to the contrary, unrevoked proxies will be voted to ratify the
selection of PricewaterhouseCoopers LLP as the independent public accountants of
the Company.
APPROVAL OF FIRST AMENDMENT TO
CENTERPOINT PROPERTIES 1993 AMENDED AND RESTATED STOCK OPTION PLAN
(PROPOSAL 3)
SUMMARY OF AMENDMENT
The Company's 1993 Amended and Restated Stock Option Plan (the "Plan")
provides incentives to trustees, executive officers and employees of the
Company. The Board of Trustees has adopted an amendment to the Plan, attached
hereto as Exhibit A (the "First Amendment"), and is recommending the First
Amendment to the shareholders for approval.
Under the First Amendment, the annual formula option grant to each
independent trustee, other than the Chairman and the Vice Chairman, will
increase to 5,000 shares from 3,000 shares, and the annual formula option grant
for the Chairman and Vice Chairman will increase to 6,500 shares from 3,000
shares. The Board of Trustees has adopted the First Amendment to provide
independent trustees with additional performance based incentives which will
increase their personal interest in the growth and progress of the Company.
VOTE REQUIRED
7
The First Amendment is being submitted to the shareholders pursuant to
the requirements of the Plan. Under the Company's By-laws, the affirmative vote
of the holders of a majority of the voting power present or represented at the
annual meeting is required for approval of the First Amendment.
Accordingly, the Board of Trustees unanimously recommends that the shareholders
vote for the approval of the first amendment to the 1993 Amended and Restated
Stock Option Plan.
SHARE OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth information as of March 1, 1999 with
respect to the beneficial ownership of the Common Shares of the Company by (1)
each person who is known by the Company to own beneficially more than 5% of its
Shares, (2) each trustee of the Company, (3) the Company's Chief Executive
Officer and four other executive officers and (4) the Company's trustees and
executive officers as a group.
SHARES BENEFICIALLY OWNED
-------------------------
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) PERCENT OF CLASS
- ------------------------------------ ------------------------ ----------------
FMR Corp.
82 Devonshire Street
Boston, Massachusetts 02109 1,657,420(2) 8.3%
Capital and Regional Properties plc
22 Grosvenor Gardens
London, England SW1W 0DH 1,008,478 5.0%
Martin Barber
(Trustee and Chairman)
22 Grosvenor Gardens
London, England SW1W 0DH 90,819(3) *
John S. Gates, Jr.
(Trustee, President and Chief
Executive Officer)
1808 Swift Road
Oak Brook, Illinois 60523 567,903(4) 2.8%
Robert L. Stovall
(Trustee and Vice Chairman)
1808 Swift Road
Oak Brook, Illinois 60523 123,356(5) *
Nicholas C. Babson
(Trustee)
1880 Country Farm Drive
Naperville, Illinois 60563 20,174(6) *
8
Norman R. Bobbins
(Trustee)
LaSalle National Bank
135 South LaSalle Stree
Chicago, Illinois 60603 288 *
Alan D. Feld
(Trustee)
1700 Pacific Avenue
Suite 4100
Dallas, Texas 75201 21,174(7) *
John J. Kinsella
(Trustee)
1550 N. State Parkway
Chicago, Illinois 60610 21,403(7) *
Thomas E. Robinson
(Trustee)
Legg Mason Wood Walker
100 Light Street
34th Floor
Baltimore, Maryland 21202 20,236(7) *
Michael M. Mullen
(Executive Vice President and
Chief Operating Officer)
1808 Swift Road
Oak Brook, Illinois 60523 147,117(8) *
Paul S. Fisher
(Executive Vice President,
Secretary, Chief Financial Officer
and General Counsel)
1808 Swift Road
Oak Brook, Illinois 60523 118,921(9) *
Rockford O. Kottka
(Senior Vice President and Treasurer)
1808 Swift Road
Oak Brook, Illinois 60523 37,951(10) *
Paul T. Ahern
Executive Vice President,
Chief Investment Officer and Director
of Portfolio Operations
1808 Swift Road
Oak Brook, Illinois 60523 13,402 (11) *
All trustees and executive
officers as a group
9
(12 persons) 1,182,744 5.9%
- -----------------------
* Less than one percent
(1) Beneficial ownership is the direct ownership of Common Stock of the
Company including the right to control the vote or investment of or
acquire such Common Stock (for example, through the exercise of stock
options or pursuant to trust agreements) within the meaning of Rule
13d-3 under the Securities and Exchange Act of 1934. The shares owned
by each person or by the group and the shares included in the total
number of shares outstanding have been adjusted in accordance with said
Rule 13d-3.
(2) As reported on a Schedule 13G filed by FMR Corp. on February 1, 1999,
FMR Corp. has sole voting power with respect to 615,900 Common Shares
and has sole dispositive power with respect to all of the 1,657,420
Common Shares.
(3) Includes options to purchase 88,100 Common Shares under the Company's
Stock Option Plan exercisable within 60 days. Excludes the shares owned
by Capital and Regional Properties plc, of which Mr. Barber is
Chairman. Mr. Barber disclaims beneficial ownership of such shares.
(4) Includes options to purchase 184,611 Common Shares under the Company's
Stock Option Plan exercisable within 60 days and 540 shares owned by an
IRA for the benefit of John S. Gates, Jr. Also includes 30,000 Common
Shares owned by the Gates Charitable Trust, under which Mr. Gates acts
as trustee and exercises voting power with respect to such Common
Shares. Mr. Gates disclaims beneficial ownership of 185 shares owned by
an IRA for the benefit of his wife.
(5) Includes options to purchase 13,500 Common Shares under the Company's
Stock Option Plan exercisable within 60 days.
(6) Includes options to purchase 18,000 Common Shares under the Company's
Stock Option Plan exercisable within 60 days.
(7) Includes options to purchase 18,600 Common Shares under the Company's
Stock Option Plan exercisable within 60 days.
(8) Includes options to purchase 97,914 Common Shares under the Company's
Stock Option Plan exercisable within 60 days and 2,000 shares owned by
his wife.
(9) Includes options to purchase 97,914 Common Shares under the Company's
Stock Option Plan exercisable within 60 days.
(10) Includes options to purchase 20,214 Common Shares under the Company's
Stock Option Plan exercisable within 60 days.
(11) Includes options to purchase 13,402 Common Shares under the Company's
Stock Option Plan exercisable within 60 days.
10
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning compensation
awarded to the Company's Chief Executive Officer and five other executive
officers for the years ended December 31, 1998, December 31, 1997 and December
31, 1996.
Annual Long Term
Compensation Compensation
------------------------------------------------ ---------------------------
Restricted Securities
Name and Other Annual Stock Underlying All Other
Principal Position Year Salary ($)(1) Bonus($) Compensation ($)(2) Award(s)($)(3) Options(#) Compensation($)
------------------ ---- ------------- -------- ------------------- -------------- ---------- ---------------
John S. Gates, Jr., 1998 244,800 150,000 -0- -0- 81,480 5,000(12)
Chief Executive 1997 228,160 127,485 -0- 151,421(4) 52,878 4,750(12)
Officer 1996 213,470 95,472 -0- 71,213(5) 34,817 5,086(11)(12)
Michael M. Mullen, 1998 204,000 115,000 -0- -0- 81,480 5,000(12)
Executive Vice-President 1997 187,500 90,650 -0- 52,511(6) 14,778 4,750(12)
and Chief Operating 1996 163,310 112,050 22,222 -0- 8,674 4,750(12)
Officer
Paul S. Fisher, 1998 204,000 106,800 -0- -0- 81,480 5,000(12)
Executive Vice- 1997 187,500 86,275 -0- 52,511(7) 14,778 4,750(12)
President, Secretary, 1996 163,310 68,400 -0- 45,000(8) 8,674 4,750(12)
Chief Financial Officer
and General Counsel
Rockford O. Kottka, 1998 132,600 68,120 -0- -0- 16,296 5,000(12)
Senior Vice-President 1997 120,000 51,627 -0- 21,987(9) 6,984 4,750(12
and Treasurer 1996 105,270 38,000 -0- 16,875(10) 4,348 4,200(12)
Paul Ahern 1998 162,500 60,250 -0- -0- 38.024 -0-
Executive Vice President, 1997 107,500 20,250 -0- -0- 7,114 -0-
Chief Investment Officer 1996 85,000 19,440 -0- -0- 2,287 -0-
and Director of Portfolio
Operations
- --------------------
(1) Includes amounts deferred at the election of the named executive
officer under the Company's 401(k) Plan.
(2) Includes payments to certain executive officers to fund tax liabilities
arising from the sale of properties to the Company.
(3) Restricted shares awarded under the Company's Restricted Stock
Incentive Plan will vest eight years from the date of the grant;
however, restricted shares awarded under the plan may vest earlier as
follows: (i) if total shareholder return averaged over a consecutive
sixty day trading period commencing no earlier than two years from the
date of the grant is greater than a target established by the
Compensation Committee at the time of the respective award, all of the
restricted shares awarded for such year will vest; (ii) upon the death,
disability or retirement of a participant, the number of vested shares
will be determined by dividing the number of months which have elapsed
from the date of such award by 96; or (iii) in the event of a change of
control of the Company, all of the restricted shares previously awarded
will vest. Dividends are paid on the restricted shares to the same
extent as on any other Common Shares.
(4) Represents 4,807 restricted Common Shares having a market value of
$162,537 based upon a closing price of $33-13/16 for the Company's
Common Shares as reported on the New York Stock Exchange on December
31, 1998.
11
(5) Represents 3,165 restricted Common Shares having a market value of
$107,017 based upon a closing price of $33-13/16 for the Company's
Common Shares as reported on the New York Stock Exchange on December
31, 1998. All 3,165 Common Shares vested as of March 12, 1998 as a
result of accelerated vesting upon the Company's attaining the target
established by the Compensation Committee.
(6) Represents 1,667 restricted Common Shares having a market value of
$56,365 based upon a closing price of $33-13/16 for the Company's
Common Shares as reported on the New York Stock Exchange on December
31, 1998.
(7) Represents 1,667 restricted Common Shares having a market value of
$56,365 based upon a closing price of $33-13/16 for the Company's
Common Shares as reported on the New York Stock Exchange on December
31, 1998.
(8) Represents 2,000 restricted Common Shares having a market value of
$67,625 based upon a closing price of $33-13/16 for the Company's
Common Shares as reported on the New York Stock Exchange on December
31, 1998. All 2,000 Common Shares vested as of March 12, 1998 as a
result of accelerated vesting upon the Company's attaining the target
established by the Compensation Committee.
(9) Represents 698 restricted Common Shares having a market value of
$23,601 based upon a closing price of $33-13/16 for the Company's
Common Shares as reported on the New York Stock Exchange on December
31, 1998.
(10) Represents 750 restricted Common Shares having a market value of
$25,359 based upon a closing price of $33-13/16 for the Company's
Common Shares as reported on the New York Stock Exchange on December
31, 1998. All 750 Common Shares vested as of March 12, 1998 as a result
of accelerated vesting upon the Company's attaining the target
established by the Compensation Committee.
(11) Represents insurance premiums paid by the Company for term life
insurance on Mr. Gates' life, the proceeds of which are payable to his
designated beneficiary.
(12) Represents Company's matching contribution to 401(k) Plan.
12
OPTION TABLES
The following table sets forth, for the Company's Chief Executive
Officer and each of the other executive officers named in the Summary
Compensation Table, information with respect to option grants during the last
fiscal year and potential realizable values for such option grants for the term
of the options.
OPTION GRANTS IN FISCAL YEAR ENDED DECEMBER 31, 1998
Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation for
Individual Grants Option Term
- ----------------------------------------------------------------------------------- ----------------------------------
Percent of
Total Options
Number of Granted to
Securities Employees in
Underlying the Year Ended Exercise of
Options December 31, Base Price Expiration
Name Granted (#) 1998 ($/Sh) Date 5% ($) 10% ($)
- ----------------------------------------------------------------------------------------------------------------------
John S. Gates, Jr. 81,480 16% $33.875 2/24/08 1,735,834 4,398,944
Michael M. Mullen 81,480 16% $33.875 2/24/08 1,735,834 4,398,944
Paul S. Fisher 81,480 16% $33.875 2/24/08 1,735,834 4,398,944
Rockford O. Kottka 16,296 3% $33.875 2/24/08 347,167 879,789
Paul Ahern 38,024 7% $33.875 2/24/08 810,056 2,052,841
- --------------------
The following table sets forth, for the Company's Chief Executive
Officer and each of the other executive officers named in the Summary
Compensation Table, information with respect to option exercises during the last
fiscal year and option values at the end of the last fiscal year.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR ENDED DECEMBER 31, 1998
OPTION VALUES AT DECEMBER 31, 1998
Number of
securities Value of unexercised
underlying in-the-money options
unexercised at fiscal year end (4)
options at fiscal ($)
year end (2) (#)
------------------- -----------------------
Shares Acquired Value Realized Exercisable/ Exercisable/
on Exercise (#) (1)($) unexercisable (3) unexercisable (3)
------------------ ------------------ ------------------- -----------------------
John S. Gates, Jr. -0- -0- 143,638 / 158,949 $2,009,276 / 2,542,664
Michael M. Mullen -0- -0- 75,352 / 101,638 1,112,850 / 1,239,073
13
Paul S. Fisher -0- -0- 75,352 / 101,638 1,112,850 / 1,239,073
Rockford O. Kottka 17,000 $278,375 13,970 / 39,898 188,816 / 250,783
Paul Ahern -0- -0- 3,522 / 45,877 30,591/ 68,199
- --------------------
(1) Based on the difference between an exercise price of $18.25 per share,
as the case may be, and the closing price of the Common Shares as
reported on the New York Stock Exchange on the date of exercise (August
14, 1998) which was $34- 5/8.
(2) All options are for Common Shares.
(3) The first number appearing in the column refers to exercisable options,
and the second number refers to unexercisable options. Options granted
under the 1993 Stock Option Plan as amended become exercisable at the
rate of 20% per year and are fully exercisable five years after the
date of the grant. Upon a change of control, all unvested options
become exercisable.
(4) Based on the difference between an exercise price of $18.25, $19.50,
$22.50 or $31.50 per share, as the case may be, and the closing price
of the Common Shares on December 31, 1998 of $33-13/16 per share as
reported on the New York Stock Exchange.
COMPENSATION OF TRUSTEES
Each independent trustee, i.e. a trustee who is not an employee of the
Company, is entitled to receive an annual fee of $20,000, at least 50% of which
is payable in cash and the remainder in Common Shares, and independent trustees
may elect to receive up to 100% of the annual fee in Common Shares, under the
Company's 1995 Director Stock Plan, as amended. The Company also pays its
independent trustees a fee of $1,000 for attendance at each meeting of the Board
and $500 for participation in telephonic meetings, and the Company reimburses
independent trustees for travel expenses incurred in connection with their
activities on behalf of the Company. Under the 1995 Director Stock Plan, as
amended, each independent trustee was awarded 288 Common Shares on May 15, 1998,
except Martin Barber and John Kinsella, who were each awarded 576 Common Shares
in lieu of the cash portion of their annual retainer fee at their election.
Trustees who are employees of the Company are not paid any trustees' fees.
Independent trustees are eligible for the grant of options under the
Company's 1993 Amended and Restated Stock Option Plan (the "Stock Option Plan").
Under the Stock Option Plan, each independent trustee was granted options on May
15, 1998 to acquire 3,000 Common Shares at $34.375 per share, expiring on May
15, 2008. Under the Stock Option Plan, options become exercisable at the rate of
20% per year and are fully exercisable five years after the date of the grant.
Upon a change of control, all unvested options become exercisable.
In addition to the options granted under the Stock Option Plan, on May
15, 1998 each independent trustee was awarded a special fully-vested option to
acquire 12,000 Common Shares (13,500 Common Shares in the case of Mr. Barber and
Mr. Stovall) at an exercise price of $34.375, expiring on May 15, 2008.
EMPLOYMENT CONTRACTS
14
The Company's executive officers have entered into employment
agreements with the Company. Such agreements have an original term of five years
(expiring February 22, 2004), subject to earlier termination, with or without
"cause" by the Company. If the termination is within 24 months after a "change
in control" and is by the Company and without cause or is by the executive for
"good reason" (which includes a material adverse change in the executive's
duties, relocation of executive by the Company by more than 35 miles and
reduction of his compensation or benefits), the executive is entitled to receive
three times his then base salary (or if greater at the time of such change in
control), three times his prior year's cash bonus, outplacement services, 36
months of continued health coverage and a further payment to gross up any taxes
owed by him as a result of excise taxes on such severance benefits. If
termination is prior to a change in control and by the Company without cause or
because of disability, the executive will receive one year's salary continuation
and a prorated bonus based on the prior year's bonus and all of his unvested
stock options and restricted stock will vest. The agreements with the executive
officers: (i) require that substantially all of their time and effort be for the
benefit of the Company (all such executive officers are employed exclusively by
the Company), (ii) set forth their minimum salaries and initial target cash
bonus and (iii) provide for their participation in a discretionary cash bonus
plan. In connection with the execution of the employment agreements, each such
executive entered into a non-competition and non-solicitation agreement with the
Company pursuant to he agreed not to compete with the Company or solicit or hire
any employee of the Company for a period of two years following such executive's
termination from the Company. The current base salaries of the executives are as
follows: Mr. Gates -- $280,000; Mr. Mullen -- $250,000; Mr. Fisher -- $250,000;
Mr. Kottka -- $135,200; and Mr. Ahern -- $200,000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company's Compensation Committee during fiscal year
1998 included Nicholas C. Babson, Alan D. Feld and John S. Gates, Jr. Mr. Feld
is the Chairman of the Committee. Mr. Gates is employed by the Company as its
President and Chief Executive Officer.
During fiscal 1998, no executive officer of the Company served on the
board of trustees or compensation committee (or other board committee performing
equivalent functions) of any other entity any of whose executive officers served
as a trustee of the Company or member of the Company's Compensation Committee.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
MISSION OF THE COMPENSATION COMMITTEE
The Board of Trustees has delegated to the Compensation Committee
strategic and administrative responsibility for the Company's management
compensation strategy and incentive compensation plan(s). The Committee's basic
responsibility is to assure that the Chief Executive Officer, other officers and
key management of the Company are compensated fairly and effectively in a manner
consistent with the Company's stated compensation strategy, competitive
practice, applicable regulatory requirements and performance results.
PAY-FOR-PERFORMANCE PLAN
In July 1994, based on the report of an independent consultant, Towers
Perrin Foster, and the recommendations of the Compensation Committee, the
Company's Board of Trustees approved a pay-for-
15
performance compensation plan (the "Plan"). The Plan is designed to provide
competitive compensation levels within the Company's industry and incentive pay
that varies based on corporate, departmental or profit center and individual
performance. To achieve this objective, the Plan contemplates that the Company
generally will maintain base salary levels for its employees at or about the
median compensation level for persons holding similar positions within the
industry, based on information drawn from compensation surveys and compensation
consultants, but that employees will have an opportunity to receive a total
compensation package significantly greater than the median based upon their
contribution to the Company's attainment of its growth objectives. For certain
senior management employees, the Plan contemplates that base salary levels will
generally be somewhat below the median, to further emphasize pay for performance
through incentives. The Plan includes three elements: a salary management
system, an annual incentive plan and a long term incentive plan.
In October, 1997, the Board of Trustees engaged FPL Associates ("FPL"),
an affiliate of Ferguson Partners and a leading independent compensation
consulting firm in the real estate industry, to provide recommendations
regarding modifications to the Plan. The Board of Trustees adopted certain the
recommendations of FPL to modify the long-term incentive plan, as set forth
below.
SALARY MANAGEMENT SYSTEM. Under the Plan, the Company has established a
salary structure by individual position within a range of plus or minus 25% of
the median marketplace rate for that position. Annual salary rates for specific
individuals will vary within the range for such position based on such
individual's experience and qualifications. The Board of Trustees, based on the
recommendations of the Compensation Committee, establishes a budget for
aggregate merit increases each year based on marketplace practices, the
Company's ability to pay and the attainment of the Company's overall objectives.
Individual merit increases generally are expected to range from 0% to 10% of
salary, and merit increases in the aggregate generally are not expected to
exceed 5%. Annual merit increases are based on individual performance levels
gauged by performance appraisals conducted every six months.
Salary adjustments are made as of July 1 each year, effective for the
following 12 months. The average increase in executive salaries effective as of
July 1, 1998 was approximately 6.1%, including certain increases attributable to
promotions. Based on the compensation review performed by FPL, executive
salaries, after giving effect to these adjustments, remain slightly below the
industry median (91%).
ANNUAL INCENTIVE PLAN. The annual incentive plan is performance-driven,
provides cash awards based on the success of the Company in any fiscal year and
provides motivation to accomplish objectives that are critical to the Company's
success. No awards will be made for any fiscal year unless the Company achieves
a threshold level of funds from operations ("FFO") for that year. The Company
will annually establish threshold, target and maximum award opportunities for
each position, based on satisfaction of certain criteria. The target award
opportunities will generally be established consistent with median rates for
comparable positions. Cash awards are declared and paid following completion of
the Company's annual audit in the first quarter of each year, based on
performance during the prior year.
The criteria and the relative weights assigned to the criteria vary
depending on an employee's position. For the Company's Chief Executive Officer,
(i) a 60% weighting factor is assigned to the Company's overall corporate
performance determined by reference to FFO per share, success of the Company's
processes and systems implementation and the overall results of a tenant
satisfaction survey conducted by CEL & Associates, a leading surveyor of tenant
satisfaction for the real estate industry, under the supervision of the
Compensation Committee, and (ii) a 40% weighting factor is assigned to a
non-formula assessment of individual performance as gauged by performance
appraisal results. For executive officers with departmental functions, (i) a 50%
16
weighting factor is assigned to the Company's overall corporate performance
determined by reference to the same measures as described above, (ii) a 30%
weighting factor is assigned to qualitative departmental performance, and (iii)
a 20% weighting factor is assigned to a non-formula assessment of individual
performance as gauged by performance appraisal results. For executive employees
in charge of property management for particular regions, (i) a 40% weighting
factor is assigned to overall corporate performance based on the same measures
as described above, (ii) a 40% weighting factor is assigned to regional
performance, determined by comparison of regional portfolio operating income to
budget, regional days outstanding in accounts receivable and the results of a
regional tenant satisfaction survey, and (iii) a 20% weighting factor is
assigned to a non-formula assessment of individual performance as gauged by
performance appraisal results. For each class of executive employee, points will
be assigned based on achievement of performance standards within each
performance category, and points will be used to determine eligibility for
threshold, target or maximum awards.
In March 1998, the Compensation Committee assigned each executive
officer a cash incentive award opportunity for 1998, expressed as a percentage
of salary, based on the attainment of threshold, target and maximum performance
levels. Depending on position, the low range was between 35% and 50% of salary,
while the high range was between 70% and 100% of salary. In March, 1999, the
Compensation Committee determined that the performance of the executive officers
entitled them to cash incentive awards ranging from approximately 48.1% to 65.2%
of salary.
LONG TERM INCENTIVE PLAN. Previously, the long-term incentive plan
consisted of two-thirds stock options under a stock option plan adopted by the
Company and approved by the Shareholders in 1993, as amended and restated in
1998 (the "Stock Option Plan") and one-third restricted stock grants under a
Restricted Stock Incentive Plan adopted by the Company and approved by the
shareholders in 1995. The analysis of the Company's long-term incentive plan by
FPL determined that option grants provide greater long-term performance and
retention incentives to employees than restricted stock grants. Based on that
analysis, the Board of Trustees decided in March 1998 to make stock option
grants the sole component of the long-term incentive plan. Also based upon the
FPL analysis of the long-term incentive plan, the Board of Trustees directed the
Compensation Committee to set higher performance standards which will be more
difficult to achieve, coupled with greater rewards if such standards are
attained. The foregoing decisions, coupled with a determination by the Board to
enlarge the class of employees eligible for stock options to all employees with
more than one year of service, has resulted in a need for more options to be
available for grant under the Stock Option Plan. The Board, therefore, has
unanimously adopted the First Amendment to the Stock Option Plan which, when
approved by the shareholders, will, among other things, increase the number of
options available for grant under the Stock Option Plan.
The new performance standards adopted by the Compensation Committee for
the award of stock options replace the previous relatively subjective standards
with objective standards, applicable to all employees participating in the Stock
Option Plan, tied to material increases in shareholder value. Under the new
standards, employee performance will be measured based upon rate of return goals
established by the Company's independent trustees, with a 40% weighting factor
assigned to total shareholder return and a 60% weighting factor assigned to FFO
per share growth. For each of these factors, the Compensation Committee will
annually establish threshold, target and maximum award opportunities for each
employment position.
Like cash awards, stock options are awarded in the first quarter of
each year following completion of the annual audit, based on performance during
the prior year. In March, 1999, the Board made stock option awards based upon
attainment of the standards in 1998. Based on its evaluation of employees'
attainment of
17
these standards in 1998, the Compensation Committee awarded stock options under
the Stock Option Plan for a total of 185,850 shares. No awards were made under
the Restrictive Stock Plan in March, 1999.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
During 1998, the Company's Chief Executive Officer was paid a salary at
the rate of $240,000 annum for the first six months and at the rate of $249,600
per annum for the last six months pursuant to an employment contract entered
into in connection with the Company's initial public offering. The Compensation
Committee did not participate in the setting of Mr. Gates' initial salary under
the employment contract, but has approved subsequent annual increases, including
a 4.0% increase effective July 1, 1998. As part of its engagement in October,
1997, FPL conducted a survey of the salaries paid by the Company to executive
employees. Mr. Gates' current salary is approximately 91% of the median for the
Company's industry reported in the survey, which is within the Company's salary
objectives.
In March 1998, the Compensation Committee assigned to Mr. Gates an
incentive award opportunity for 1998, expressed as a percentage of salary, based
on corporate and individual performance meeting or exceeding threshold, target
or maximum levels. As indicated above, a 60% weighting factor was assigned to
corporate performance determined by reference to FFO per share, success of the
Company's processes and systems implementation, and the overall results of an
independent tenant satisfaction survey conducted under the supervision of the
Compensation Committee. A 40% weighting factor was assigned to individual
performance, based on success in designing and implementing internal processes,
systems and organizational development initiatives designed to maintain the
highest levels of tenant satisfaction and the internal capacity and controls
necessary to sustain continuing high levels of growth. On the basis of points
awarded in each of these categories, the Compensation Committee in March, 1999
awarded Mr. Gates a cash bonus of $162,739, or 65.2% of salary.
Also in March, 1999, the Compensation Committee, applying the
performance standards for long-term incentives, approved an award of 47,250
stock options, representing an award slightly below the target level for
shareholder return and award slightly above the target level for growth in FFO
per share.
Nicholas C. Babson, Chairman
Alan D. Feld
John S. Gates, Jr.
PERFORMANCE GRAPH
The following graph compares the percentage change in cumulative total
return on the Company's Common Stock for the period December 31, 1993 through
December 31, 1998 with the percentage change in (a) the Standard & Poor's 500
index ("S&P") for the same period and (b) the Total Return Index for Equity
REITs published by The National Association of Real Estate Investment Trusts
("NAREIT") for the same period. (The NAREIT index for Equity REITs, which is
published monthly, is an index of approximately 173 REITs which includes REITs
with 75% or more of their gross invested book value of assets invested directly
or indirectly in the ownership of real property.) Cumulative total return
includes reinvestment of dividends. The historical information set forth below
is not necessarily indicative of future performance.
18
CENTERPOINT PROPERTIES TRUST
[GRAPHIC OMITTED]
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1993 1994 1995 1996 1997 1998
- ------------------------- --------------- ----------------- ------------------ ------------------ ------------------ ------------
CenterPoint Properties
Trust $100 $112.83 $144.37 $221.17 $250.05 253.21
--------------- ----------------- ------------------ ------------------ ------------------ ------------
S&P 500 Index 100 101.31 139.23 171.19 228.31 293.57
--------------- ----------------- ------------------ ------------------ ------------------ ------------
NAREIT Equity Total 100 103.17 118.92 160.86 193.45 159.59
Return Index
- ------------------------- --------------- ----------------- ------------------ ------------------ ------------------ ------------
CERTAIN TRANSACTIONS
TRANSACTIONS WITH MANAGEMENT AND OTHERS
In June, 1996, the Company, through a partnership of which the Company
is the general partner, exercised options to acquire three properties from
entities in which Robert L. Stovall, a trustee of the Company, and Michael M.
Mullen, an executive officer of the Company, have an interest. The aggregate
purchase price for the properties was approximately $24.6 million, and the
transactions satisfied the Company's investment criteria and were approved by
the Company's independent trustees. In order to mitigate tax liabilities,
Messrs. Stovall and Mullen continue to own a minority interest in the
partnership owning two of the purchased properties.
Since the initial public offering in December, 1993, the Company has
also been managing the three properties described in the preceding paragraph and
two additional properties owned by entities in which certain executive officers
of the Company have an interest and which are not deemed suitable for
acquisition by the Company. For its management services, the Company has been
receiving an aggregate management fee equal to approximately 3% of gross rents
from the three option properties, and approximately 2% and 1%, respectively, of
gross rents from the two other properties.
19
OTHER MATTERS
The Board of Trustees knows of no matters which will be presented for
consideration at the meeting other than the matters referred to in this
statement. Should any other matters properly come before the meeting, it is the
intention of the persons named in the accompanying proxy to vote such proxy in
accordance with their best judgment.
The Company will bear the cost of this solicitation of proxies. In
addition to solicitation of proxies by mail, the Company may reimburse brokers
and other nominees for the expense of forwarding proxy materials to the
beneficial owners of stock held in their names. Trustees, officers and employees
of the Company may also solicit proxies on behalf of the Board of Trustees but
will not receive any additional compensation therefor.
The Company's Annual Report to Shareholders for the fiscal year ended
December 31, 1998 is being furnished to shareholders simultaneously with this
Proxy Statement.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.
THEREFORE, ALL SHAREHOLDERS ARE URGED TO COMPLETE, SIGN,
DATE AND RETURN THE ACCOMPANYING FORM OF PROXY IN THE
ENCLOSED ENVELOPE.
By order of the Board of Trustees,
Paul S. Fisher
SECRETARY
20
EXHIBIT A
FIRST AMENDMENT
CENTERPOINT PROPERTIES TRUST
1993 AMENDED AND RESTATED STOCK OPTION PLAN
The CenterPoint Properties 1993 Amended and Restated Stock Option Plan (the
"Plan") is hereby amended as follows:
ARTICLE 1
Section 5.3 is hereby amended in its entirety to henceforth read as follows:
"5.3 FORMULA GRANTS FOR INDEPENDENT TRUSTEES. Notwithstanding any
provision of this Plan to the contrary, each Independent Trustee
other than the Chairman and Vice Chairman shall receive an
Option for 5,000 shares, and the Chairman and Vice Chairman
shall each receive an Option for 6,500 shares, with an Option
Price equal to Fair Market Value at the time the Option is
issued upon election to the Board and an Option for 5,000
shares, or, in case of the Chairman or Vice Chairman, 6,500
shares, with an Option Price equal to Fair Market Value at the
time the Option is issued upon each re-election of such
Independent Trustee to the Board. Independent Trustees shall not
be eligible to receive any other options under the Plan."
ARTICLE 2
This amendment is effective as of the date of adoption by the Board, subject to
approval by the shareholders of CenterPoint Properties Trust.
CENTERPOINT PROPERTIES TRUST PROXY
1808 SWIFT DRIVE
OAK BROOK, ILLINOIS 60523
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF
CENTERPOINT PROPERTIES TRUST FOR THE
ANNUAL MEETING OF SHAREHOLDERS ON MAY 20, 1999
The undersigned hereby appoints Martin Barber, John S. Gates, Jr. and
Paul S. Fisher, or any of them, jointly and severally, as Proxies each with
the power to appoint his substitute, and hereby authorizes them to represent
and to vote, as designated on the reverse side, all of the Company's Common
Shares held in the undersigned's name and shares held by the agent in the
Plan, hereafter described, subject to the voting direction of the undersigned
at the Annual Meeting of Shareholders to be held at 1808 Swift Drive, Oak
Brook, Illinois on Thursday, May 20, 1999, or any adjournment thereof and, in
the Proxies' discretion, to vote upon such other business as may properly
come before the meeting, all as more fully set forth in the Proxy Statement
related to such meeting receipt of which is hereby acknowledged.
ALL COMMON SHARES TO BE VOTED HEREBY BY THE UNDERSIGNED INCLUDE SHARES,
IF ANY, HELD IN THE NAME OF THE AGENT, FOR THE BENEFIT OF THE UNDERSIGNED, IN
THE COMPANY'S DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN.
Comments/Change of Address:
- ----------------------------------------------------- -----------
SEE REVERSE
- ----------------------------------------------------- SIDE
-----------
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
Please mark your
/X/ votes as in this
example.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, IT WILL BE VOTED FOR THE ELECTION OF THE
TRUSTEE NOMINEES, FOR THE APPOINTMENT OF INDEPENDENT AUDITORS AND FOR THE
APPROVAL OF THE FIRST AMENDMENT TO THE 1993 AMENDED AND RESTATED STOCK OPTION
PLAN.
- ------------------------------------------------------------------------------
FOR WITHHELD Trustee Nominees:
A. ELECTION OF Nicholas C. Babson John S. Gates, Jr.
TRUSTEES / / / / Martin Barber John J. Kinsella
Norman R. Bobins Michael M. Mullen
Alan D. Feld Thomas E. Robinson
Paul S. Fisher Robert L. Stovall
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FOR AGAINST ABSTAIN
B. Appointment of / / / / / /
Pricewaterhouse
Coopers LLP as
Auditors
C. Approval of the First / / / / / /
Amendement to the
Amended and Restated
1993 Stock Option
Plan.
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SIGNATURE(S)
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DATE
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NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
The signer hereby revokes all proxies heretofore given by the signer to vote
at said meeting or any adjournments thereof.
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FOLD AND DETACH HERE